‘Pay or Play’
Requirements Delayed Until 2015
The U.S. Treasury Department
that it will delay
enforcement of the ‘pay or play’ requirements for one year. As a result,
any penalties (also known as employer shared responsibility payments) will not
apply until 2015.
The ‘pay or play’ provisions
require large employers–generally those with at least 50 full-time employees
and full-time equivalents–to offer affordable health insurance that provides a
minimum level of coverage to full-time employees (and their dependents) or
pay a penalty tax if a full-time employee receives a premium tax credit or
cost-sharing reduction for purchasing coverage on an Exchange. The
requirements were originally to become effective on January 1, 2014.
According to the announcement,
transition relief is being provided with respect to certain employer and
insurer reporting requirements under the law, which will make it impractical to
determine which employers owe shared responsibility payments for 2014.
Consequently, the transition
relief is being extended to the ‘pay or play’ penalties and any such penalties
will not apply for 2014. Instead, employer shared responsibility payments will
not apply until 2015. The agency encourages employers to
maintain or expand their health coverage during the 2014 transition period.
Formal agency guidance is
expected to be published in the near future describing this transition relief.
The delay does not affect employees’ access to the premium tax credits
available under the law or any other provision of Health Care Reform.